8-C-i

APPENDIX 8-C. MARGINAL ENERGY PRICE FACTOR CALCULATIONS FOR 

FURNACE FANS

TABLE OF CONTENTS

8-C.1 INTRODUCTION ....................................................................................................... 8-C-1

8-C.2 MARGINAL PRICE FACTOR CALCULATION FOR ELECTRICITY AND 

NATURAL GAS ......................................................................................................... 8-C-1

8-C.3 RESULTS .................................................................................................................... 8-C-2

LIST OF TABLES

Table 8-C.3.1 Marginal Electricity Price Factors using RECS 2005 billing data ............ 8-C-2

Table 8-C.3.2 Marginal Natural Gas Price Factors using RECS 2005 billing data.......... 8-C-3

Table 8-C.3.3 Marginal Monthly Electricity Prices for 2010 Using Marginal Price 

Factors (2011$/kWh) ................................................................................. 8-C-4

Table 8-C.3.4 Marginal Monthly Natural Gas Prices for 2010 Using Marginal Price 

Factors (2011$/MMbtu)............................................................................. 8-C-5
8-C-1

APPENDIX 8-C. MARGINAL ENERGY PRICE FACTOR CALCULATIONS FOR 

FURNACE FANS

8-C.1 INTRODUCTION

Marginal energy prices are the prices consumers pay for the last unit of energy used. 

DOE used the marginal energy prices for each house for the cost of saved energy associated with 

the use of higher-efficiency equipment. Since marginal prices reflect a change in a consumer’s 

bill associated with a change in energy consumed, such prices are appropriate for determining 

energy cost savings associated with possible change to efficiency standards.

EIA provided RECS 2005 billing data that had been gathered from a subset of RECS 

housing records. For each household with billing data, the following are provided for each billing 

cycle: the start and end date, the electricity consumption in kWh, the electricity cost in dollars, 

the natural gas bill in dollars, and the gas consumption in hundreds of cubic feet. This data was 

used to determine marginal energy price factors by census division and four large states that are 

then used to convert average monthly energy prices into marginal monthly energy prices. Since a 

furnace fan operates during both the heating and the cooling season, DOE determined summer 

and winter marginal price factors.

For oil-fired furnaces and boilers, DOE used the average oil prices for each house for 

both base case equipment and higher-efficiency equipment, as the data necessary for estimating 

marginal prices were not available. DOE used the same method for LPG-fired equipment.

8-C.2 MARGINAL PRICE FACTOR CALCULATION FOR ELECTRICITY 

AND NATURAL GAS

DOE used RECS 2005 billing data provided by EIA to calculate marginal energy prices.

Deriving marginal energy prices by calculating energy bills based on even a detailed knowledge 

of a consumer's utility tariff is hampered by the lack of information on items that affect marginal 

energy prices but are not normally evident on utility tariffs. Taxes, special fees, and one-time 

surcharges or rebates included in the energy bill are examples of this type of item. Use of RECS 

billing data avoids having to estimate the effect of non-tariff items on consumer marginal energy 

prices.

DOE estimated average and marginal electricity and natural gas prices from the RECS 

monthly billing data. Marginal energy prices were calculated with a linear regression of monthly 

customer bills to monthly customer energy consumption for each household with billing data 

available. Household identifying features such as state, utility service area or zip code were not 

reported in the data preventing a localized aggregation. DOE therefore aggregated the energy 

prices into the available household identifying features (namely census division and four large 

states).
8-C-2

DOE interpreted the slope of the regression line for each household as the marginal 

energy price for that household. DOE kept the marginal energy prices only for sample housing 

records with regression values greater or equal to 85%. The 85% limit was chosen in order to get 

a close correlation between the cost and consumption data. Any higher limit excluded most of 

the housing records from the analysis; any lower limit lost the linearity of the relationship 

between the seasonal costs and consumption. The slopes of these regression lines are the 

estimate of the seasonal marginal prices for that household.

To determine the marginal price factor DOE divided the seasonal marginal and average 

electricity price for each household. DOE then aggregated the individual electricity and natural 

gas marginal price factors using the RECS household weights.

8-C.3 RESULTS

Table 8-C.3.1 and Table 8-C.3.2 show the resulting marginal electricity and natural gas 

marginal price factors.

Table 8-C.3.1 Marginal Electricity Price Factors using RECS 2005 billing data 

Census Division and Four 

Large States

Winter Summer

Division 1 0.68 0.89

Division 2 0.91 0.99

Division 3 0.90 0.93

Division 4 0.91 0.89

Division 5 0.90 0.96

Division 6 0.88 0.95

Division 7 0.70 0.96

Division 8 0.93 0.89

Division 9 0.91 0.91

New York 0.60 0.87

California 0.96 0.96

Texas 0.63 0.97

Florida 0.87 0.90
8-C-3

Table 8-C.3.2 Marginal Natural Gas Price Factors using RECS 2005 billing data 

Census Division and Four 

Large States

Winter Summer

Division 1 0.93 0.86

Division 2 0.96 0.83

Division 3 0.92 0.76

Division 4 0.89 0.70

Division 5 0.89 0.77

Division 6 0.94 0.74

Division 7 0.88 0.85

Division 8 0.87 0.65

Division 9 1.01 0.85

New York 0.85 0.78

California 0.98 0.88

Texas 0.85 0.55

Florida 1.00 0.92

DOE then applied the marginal price factors to the monthly energy prices in appendix 7-

B to develop marginal monthly energy prices for 2010 (Table 8-C.3.3 and Table 8-C.3.4).
8-C-4

Table 8-C.3.3 Marginal Monthly Electricity Prices for 2010 Using Marginal Price 

Factors (2011$/kWh)

Geographical Area Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Connecticut, Maine, 

New Hampshire, Rhode 

Island, Vermont 0.119 0.120 0.121 0.158 0.160 0.161 0.160 0.160 0.160 0.124 0.123 0.122

Massachusetts 0.100 0.101 0.101 0.132 0.134 0.138 0.135 0.136 0.138 0.105 0.102 0.104

New York 0.109 0.110 0.110 0.163 0.167 0.174 0.176 0.176 0.176 0.116 0.114 0.112

New Jersey 0.145 0.146 0.147 0.160 0.165 0.179 0.183 0.183 0.179 0.150 0.150 0.150

Pennsylvania 0.111 0.111 0.113 0.127 0.133 0.139 0.140 0.138 0.136 0.123 0.118 0.114

Illinois 0.094 0.098 0.102 0.111 0.115 0.119 0.119 0.118 0.118 0.115 0.103 0.097

Indiana, Ohio 0.090 0.092 0.095 0.104 0.109 0.110 0.107 0.107 0.108 0.105 0.101 0.094

Michigan 0.113 0.113 0.113 0.117 0.118 0.123 0.124 0.125 0.122 0.114 0.114 0.114

Wisconsin 0.113 0.117 0.116 0.122 0.124 0.125 0.122 0.122 0.123 0.120 0.119 0.116

Iowa, Minnesota, North 

Dakota, South Dakota 0.088 0.090 0.091 0.093 0.098 0.102 0.102 0.102 0.099 0.097 0.094 0.091

Kansas, Nebraska 0.079 0.082 0.084 0.087 0.090 0.097 0.097 0.098 0.096 0.090 0.086 0.082

Missouri 0.072 0.073 0.077 0.080 0.091 0.099 0.097 0.097 0.088 0.082 0.080 0.074

Virginia 0.089 0.090 0.093 0.103 0.107 0.111 0.111 0.111 0.109 0.099 0.095 0.091

Delaware, District of 

Columbia, Maryland, 

West Virginia 0.109 0.110 0.112 0.123 0.133 0.143 0.142 0.142 0.140 0.123 0.117 0.114

Georgia 0.084 0.087 0.089 0.096 0.101 0.108 0.109 0.110 0.105 0.093 0.089 0.084

North Carolina, South 

Carolina 0.090 0.092 0.093 0.102 0.103 0.102 0.104 0.104 0.104 0.100 0.097 0.093

Florida 0.101 0.102 0.103 0.108 0.107 0.105 0.106 0.107 0.107 0.103 0.104 0.103

Alabama, Kentucky, 

Mississippi 0.082 0.084 0.086 0.098 0.099 0.099 0.098 0.099 0.098 0.091 0.089 0.085

Tennessee 0.081 0.082 0.083 0.092 0.094 0.092 0.091 0.091 0.091 0.087 0.087 0.085

Arkansas, Louisiana, 

Oklahoma 0.059 0.061 0.063 0.089 0.091 0.094 0.093 0.094 0.095 0.068 0.064 0.061

Texas 0.068 0.069 0.072 0.115 0.119 0.123 0.123 0.123 0.122 0.078 0.073 0.071

Colorado 0.101 0.102 0.103 0.100 0.104 0.104 0.103 0.103 0.103 0.108 0.106 0.104

Idaho, Montana, Utah, 

Wyoming 0.079 0.080 0.080 0.077 0.079 0.081 0.082 0.081 0.081 0.085 0.082 0.081

Arizona 0.091 0.094 0.097 0.097 0.107 0.107 0.105 0.105 0.105 0.110 0.098 0.098

Nevada, New Mexico 0.109 0.112 0.112 0.109 0.108 0.106 0.105 0.106 0.107 0.115 0.115 0.112

California 0.145 0.143 0.143 0.142 0.146 0.149 0.153 0.152 0.146 0.141 0.146 0.149

Oregon, Washington 0.077 0.078 0.078 0.077 0.077 0.078 0.079 0.079 0.080 0.080 0.080 0.080

Alaska 0.144 0.146 0.149 0.152 0.156 0.156 0.158 0.157 0.155 0.154 0.153 0.150

Hawaii 0.255 0.256 0.255 0.258 0.259 0.261 0.265 0.266 0.267 0.271 0.272 0.271

United States 0.110 0.112 0.115 0.118 0.122 0.124 0.125 0.125 0.124 0.122 0.118 0.114
8-C-5

Table 8-C.3.4 Marginal Monthly Natural Gas Prices for 2010 Using Marginal Price 

Factors (2011$/MMbtu)

Geographical Area Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Connecticut, Maine, 

New Hampshire, Rhode 

Island, Vermont 14.15 14.28 14.37 13.58 14.15 15.24 16.51 16.78 19.01 15.79 15.23 14.78

Massachusetts 13.55 13.66 13.55 12.96 11.77 12.26 13.44 14.17 15.97 12.85 14.22 14.10

New York 11.63 11.43 11.54 11.06 12.19 13.81 14.75 14.53 18.03 13.49 12.27 11.51

New Jersey 11.89 11.84 11.88 10.55 11.29 12.45 12.97 12.94 15.29 13.45 12.49 12.33

Pennsylvania 12.04 12.20 12.37 11.16 12.44 14.06 15.64 15.99 18.26 14.58 13.09 12.43

Illinois 8.93 9.05 8.94 7.80 9.21 10.55 11.13 11.29 13.84 10.28 9.30 8.86

Indiana, Ohio 10.47 10.53 10.72 9.38 10.28 11.66 12.50 12.59 15.65 11.85 10.81 10.62

Michigan 9.66 9.69 9.79 8.47 9.30 10.69 11.81 12.21 14.99 11.52 10.45 10.05

Wisconsin 9.94 9.72 9.81 8.21 8.18 9.24 9.51 9.66 11.90 9.33 10.21 10.00

Iowa, Minnesota, North 

Dakota, South Dakota 7.95 7.71 7.75 6.30 7.06 8.20 8.79 9.04 12.15 8.82 8.29 7.99

Kansas, Nebraska 9.25 9.27 9.25 7.83 8.75 10.15 10.78 11.22 15.58 12.12 10.08 9.53

Missouri 11.36 11.37 11.39 9.72 11.25 13.52 15.29 16.18 21.68 16.60 13.37 12.10

Virginia 11.78 11.43 11.12 10.65 12.44 14.44 15.65 15.52 20.07 14.73 12.26 11.83

Delaware, District of 

Columbia, Maryland, 

West Virginia 11.51 11.47 11.60 10.83 12.12 13.75 14.82 14.85 18.74 13.94 12.40 11.87

Georgia 13.07 13.83 14.34 13.57 16.57 18.41 19.32 19.15 23.37 18.62 14.62 13.75

North Carolina, South 

Carolina 13.09 12.97 13.19 12.11 13.78 16.27 17.26 18.01 22.39 16.78 14.32 13.84

Florida 16.17 16.49 17.48 17.04 18.57 19.69 20.26 20.70 22.14 22.05 20.25 17.91

Alabama, Kentucky, 

Mississippi 11.60 11.52 11.80 10.13 11.49 12.70 13.03 13.27 17.54 15.20 13.15 12.21

Tennessee 10.79 10.98 10.91 9.14 9.99 11.34 12.03 12.40 16.08 13.91 12.03 11.37

Arkansas, Louisiana, 

Oklahoma 10.46 10.40 10.58 11.10 13.20 14.49 15.30 15.73 18.15 14.99 12.79 11.16

Texas 8.81 8.89 9.09 6.59 7.55 8.33 8.56 8.74 15.96 12.32 10.25 9.12

Colorado 6.51 6.58 6.75 5.19 5.67 7.00 7.12 7.57 10.97 7.87 7.07 6.71

Idaho, Montana, Utah, 

Wyoming 7.31 7.34 7.49 5.46 5.69 6.13 6.63 6.91 10.02 7.81 7.67 7.47

Arizona 12.22 12.56 12.94 10.49 11.75 12.93 14.01 14.62 21.78 17.93 15.12 13.03

Nevada, New Mexico 8.75 8.94 9.18 7.35 8.32 9.53 9.41 9.79 14.64 11.44 9.76 8.88

California 9.88 9.76 9.37 8.30 8.78 9.22 9.24 9.07 10.18 10.06 9.56 9.68

Oregon, Washington 11.78 11.91 11.99 10.42 10.83 11.40 12.60 13.15 14.92 13.66 12.58 12.21

Alaska 8.76 8.82 8.90 7.62 7.95 8.23 8.87 8.76 9.54 9.13 8.82 9.01

Hawaii 43.36 43.73 43.40 36.91 37.63 37.88 38.72 39.67 46.45 46.74 46.80 46.00

United States 11.25 11.32 11.39 11.90 13.00 14.50 15.33 15.61 14.98 13.07 11.96 11.50